Can The U.S. Break China's Stranglehold On Rare Earth Metals?

You may not know what rare earth metals are, but they probably feature prominently in your life: These 17 chemical elements, which are buried in the Earth's crust, are found in common electronics (lithium-ion batteries, laser pointers), and many clean technologies (electric car motors, solar panels, wind turbines). It's not surprising, then, to learn that our demand for dysprosium, neodymium, terbium, and the like have increased in recent years. As it stands, the Western hemisphere is almost entirely beholden to China for its supply of rare earths. And China is willing to play hardball with its mineral deposits, putting the U.S. in a dangerous position where a key part of our economy and society is controlled by a not altogether friendly country. But that may be about to change.

Rare earth metals, paradoxically, are actually not that rare at all—in fact, many rare earths are more common than gold. But up until now, the economic incentives to mine them just haven't been there. Recently, however, China started to curb exports and raise prices of these previously cheap metals, realizing both that they need a large domestic supply and that much of the world is dependent on them. Outside of China, rare earth metals are seen in high concentrations in select sites in the U.S., Canada, Australia, and elsewhere. And that's creating a burgeoning rare earth industry in the U.S.

In the 1960s and 1970s, the USGS flew over the U.S., using airborne magnetometers to find anomalies in the Earth's magnetic field that could signify big rare earth deposits. In recent years, mining companies have taken it upon themselves to confirm the presence of these deposits. They use everything from satellite technology to "almost old-fashioned prospecting. They go out in the field looking for interesting rocks and minerals, and indications of spots of interest," says Gareth Hatch, Founding Principal of Technology Metals Research.

There are hurdles for ambitious companies to jump through. The U.S. used to produce rare earth metals at the Mountain Pass Mine in California, but it was shut down in 2002 largely because of lack of demand and environmental issues (the mine spilled a large amount of radioactive water into a neighboring lake). In 2008, Chevron sold the site to Molycorp, a company interested in reviving the old mine. Molycorp is currently expanding and modernizing the mine—a process that will yield 40,000 metric tons of rare earths by 2013, or 25% of the world's supply.

The company, which is spending $2.4 million a year on environmental compliance and monitoring, says it plans to keep the process as clean as possible. "If what they say is what they do, you're looking at a much more environmentally
friendly process than in China, with the recycling of water and reducing
effluent into the environment," says Hatch. "But at the end of the day, you're still
messing around with some pretty nasty chemicals, and you still have waste piles of
rock and radioactive material." Fast Company's calls to Molycorp have not been returned.

In China, rare earth mines are often responsible for egregious environmental violations, including air pollution and the production of wastewater that contains large amounts of radioactive material and acid. The pollution makes people sick, and it destroys local farmland and waterways.

California's Mountain Pass is huge, but it isn't enough to supply all of America's rare earth metals. This is partially because it will produce mainly light rare earths instead of heavy rare earths, a group of chemicals that are often found in smaller concentrations. We need both types to manufacture the electronics and gadgets we enjoy so much.

There is hope for American independence in the heavy rare earth arena, however. The Pea Ridge iron mine in Missouri has a known deposit, and Quest Rare Minerals is exploring some major heavy rare earth mines in Quebec, a place that probably isn't as likely as China to cut off the U.S. from imports or jack up prices impossibly high.

And the U.S. may soon have another major rare earth mine to count on in Nebraska, where Quantum Rare Earths is working on what may be the biggest untapped rare earths deposit in the world. But there's a catch: Actually mining this deposit may not happen for a while. "It needs to be further explored and defined," says Scott Wescott, a corporate communications representative for Quantum Rare Earths. That means it will take at least two to three years just to figure out the economics of mining and work on gathering permits for construction.

The permitting process is a major hurdle for U.S. companies. "The time it takes to get through the red tape is mind-boggling," says Hatch. One DOE report claims that it will take 15 years to break dependence on Chinese rare earth metals (Hatch believes it's more like eight to 10 years).

But we don't necessarily have to wait for companies outside of China to get moving on their rare earth projects. In the meantime, it's worth paying attention to companies like Nanosys, which manufactures more sustainable replacements for some of the rare earths found in LED backlighting.

Even with multiple mines and creative companies working on replacements, the U.S. will likely remain at least partially dependent on China for rare earths. It's the classic problem of competing with China: Multiple layers of red tape may do some good in protecting the environment, but they really slow things down.

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Despite the temporary risk of a rare-earth monopoly by China, their demand for rare-earth minerals may be the solution to our getting OUT of Afghanistan.We need to "sell" Afghanistan to its neighbor China and have China mine the minerals in the NE Afghan mountains.Not only does China have the technology and finances to extract the minerals, they are also better at providing the security and getting rid of insurgencies than we are. And as a neighbor of Afghanistan, they can do it much less expensively than we can. They also would have far less tolerance of the heroin grown in SW Afghanistan, especially since it is funding much of the Russian criminal mob. (Heroin addiction in Russia is now a greater problem than alcoholism.)It would be a win-win-win solution for everyone except the criminals, the Taliban, and Halliburton.

Finally a way for us to get out of debt. As long as we do not allow the government to become involved. Note to companies planning to do this; be environmentally conscious and do NOT allow a window of opportunity to the government. Lately they have messed up everything they try to fix.

I am an equity stake holder on a Rare earth metal Tantalum Concession in Zimbabwe.Tantalum metals, powders and oxides are used in smart weapons, anodes,body implants, smartphones ,Ipads and the like.Any interested parties can contact me directly with their vested interest in purchasing the ore at spot prices for processing in their respective industries

Come on Bette - no-one believes extraction is sustainable. All extractive technologies are interim measures until we find solutions that are sustainable. The bronze age didn't end because we ran out of bronze, but because we found a superior technology. Same with steam, and same (eventually) with hydrocarbons. Endlessly inventive, we'll one day also be 'endlessly' sustainable.

Strict environmental regulation in the US is the reason for the decline in US production. China does not impose such strict environmental regulations so it has a dramatic competitive advantage in this industry as well as many others.